Cement set for a shake-up?
NEWS ANALYSIS: Bidding war looms in PPC saga
Competition authorities will be pressed to make good decisions about proposed merger
It’s all smoke and mirrors around a possible merger with PPC. The broader view is to build an African cement titan. The Public Investment Corp (PIC), which holds 66% of PPC suitor AfriSam, has now bought up a smidgen more than 25% of SA’s biggest cement maker. With 75% of shareholders needing to approve any deal, this has stalemated more than 25% of PPC shareholders who have rejected a joint conditional partial offer from AfriSam and Canada’s Fairfax Africa Investments. Apart from AfriSam-Fairfax Africa, the market has little to go on when it comes to pricing a merger — probably even less so now that Nigeria’s Dangote has pulled out. Fairfax Africa has undertaken to buy R2bn in ordinary shares in PPC at R5.75/share. The proposed merger ratio is a share exchange of 58 PPC shares for 42 AfriSam shares. The conditional partial offer proposal includes a R4bn recapitalisation of AfriSam before any merger proceeds. PPC and some of the group’s bigger shareholders are far from impressed. Th...
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